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DIG

0.00%
BAD

Dunedin Income Growth Investment Trust Reports Mixed Annual Results

Why we think this is bad

The investment trust's performance has been disappointing, with a significant underperformance against its benchmark. While the NAV total return of 9.0% and share price total return of 8.4% are positive in absolute terms, they fall well short of the FTSE All-Share Index's 17.1% return. This underperformance, coupled with a widening discount to NAV from 10.7% to 11.6%, suggests waning investor confidence. The increase in net gearing from 6.8% to 10.9% also adds to the risk profile. Despite a modest 3.3% increase in dividends and a 2.1% growth in revenue earnings per share, the overall outlook remains cautious, with mentions of challenging market conditions, headwinds, and economic uncertainty. The focus on high-quality companies and sustainable investing, while potentially beneficial in the long term, appears to have hindered short-term performance in the current market environment.

Key Points

  • NAV total return of 9.0% and share price total return of 8.4%, underperforming the benchmark's 17.1%
  • Dividend increased by 3.3% to 14.20p per share, with a 5.0% yield
  • Revenue earnings per share grew by 2.1% to 13.82p
  • Net gearing increased from 6.8% to 10.9%
  • Discount to NAV widened from 10.7% to 11.6%
  • Focus on high-quality companies and sustainable investing may have impacted short-term performance
  • Cautious outlook due to challenging market conditions and economic uncertainty

Summary

The investment trust reported underperformance against its benchmark, with a 9.0% NAV total return compared to the index's 17.1%. Despite dividend growth, widening discount and cautious outlook raise concerns.

Dunedin Income Growth Investment Trust PLC's annual results reveal a mixed performance. The trust achieved a 9.0% NAV total return and an 8.4% share price total return, significantly underperforming the FTSE All-Share Index's 17.1% return. On a positive note, the trust increased its dividend by 3.3% to 14.20p per share, maintaining its track record of dividend growth. Revenue earnings per share grew modestly by 2.1% to 13.82p. However, concerns arise from the widening discount to NAV, which increased from 10.7% to 11.6%, and the rise in net gearing from 6.8% to 10.9%. The trust's focus on high-quality companies and sustainable investing may have contributed to short-term underperformance. The outlook remains cautious, with mentions of challenging market conditions, headwinds, and economic uncertainty.

Key Dates

May 22, 2025
Annual General Meeting
May 7, 2025
Online Shareholder Presentation
May 30, 2025
Final dividend payment
ANNUAL RESULTS